Citigroup, WaMu, Novellus, Amylin

MichaelBaron

Among the companies whose shares are expected to be active in Tuesday's session is Deere & Co.
DE, -3.58%
The world's largest farm-equipment maker is expected to show a fourth-quarter profit of 18 cents a share, according to Thomson First Call.

Audio and video equipment retailer Tweeter Home Entertainment Group
TWTR, -5.02%
is expected to post a loss for the fourth quarter, of 40 cents a share.

Citigroup
C, -0.51%
said late Monday that it plans to buy the consumer loan arm of Washington Mutual for $1.25 billion as it expands its presence in consumer lending. Citigroup said the deal will be accretive to its 2004 earnings and is expected to close in the first quarter of 2004. Washington Mutual said it intends to use proceeds of the sale to fund retail store growth, asset generation and other initiatives in 2004. The company said its previous 2004 earnings guidance reflects the anticipated gain and other effects of this transaction. See full story. Shares of Citigroup ended Monday's regular session up 40 cents at $46.74, while shares of Washington Mutual closed higher by 39 cents at $46.55.

Novellus
NVLS
said during a scheduled mid-quarter update that it now expects orders of $275 million, shipments of $218 million, revenue of $220 million, and earnings of 6 cents a share for the fourth quarter. Analysts are currently looking for a profit of 5 cents a share in the quarter, according to Thomson First Call. Shares of Novellus rose 1.5 percent in late dealings to $44.20.

Eli Lilly
LLY, +1.74%
and Amylin Pharmaceuticals
AMLN
said late Monday that their drug, exenatide, designed for people with type 2 diabetes, had shown positive results in the final stages of human testing. "We believe the data from the Phase 3 program provide a solid base for a regulatory submission to the FDA, currently projected for mid-2004," said Elizabeth Klimes, president of Diabetes Care and Growth Disorders at Lilly. See full story. Shares of Lilly, which added 89 cents to finish Monday's regular session at $70.50, traded unchanged after the bell, while shares of Amylin gained $1.15, or 4.5 percent, to $26.25.

Veritas DGC
VTS, -1.29%
an oil services provider, posted a fiscal first-quarter loss versus a year-ago profit late Monday as the most recent quarter suffered from a steep amortization charge. Veritas said it lost $26.3 million, or 78 cents a share, vs. a profit of $1.6 million, or 5 cents a share, in the first quarter a year ago. Revenue declined to $104.4 million from $137.5 million. "We continue to be disappointed with activity levels in the seismic industry," Chairman and CEO Dave Robson said in a statement. "The quarter's results reflect the current lackluster spending by our customers." Shares of Veritas, which added 6 cents to end the regular session at $8.95, fell to $7.80 in very thin after-hours trading.

Vascular Solutions
VASC
said the U.S. Food and Drug Administration had given direct sales clearance for its Vari-Lase laser console, which is used for the non-surgical removal of varicose veins. The move will allow Vascular Solutions to sell the console in the U.S. through its direct sales force. The Minneapolis-based company said it expects to begin sales in January. Shares of Vascular Solutions rose 11.8 percent in late dealings to $6.92.

Semtech
SMTC, -6.56%
a maker of analog and mixed-signal semiconductors, reported third-quarter net profit of $9.3 million, or 12 cents a share, on sales of $48.1 million. During the same period a year ago, Semtech posted a net profit of $13.04 million, or 17 cents a share, with sales of $47.17 million. The company said, based on the current backlog of orders, it expects to earn a fourth-quarter profit of 14 cents a share, with sales rising 8 percent to 10 percent over third-quarter figures. Shares of Semtech added 81 cents, or 3.3 percent, in after-hours trade to $25.27.

Semiconductor testing equipment maker Credence Systems
CMOS
reported a fiscal fourth-quarter net loss of $22.1 million, or 35 cents a share, on revenue of $57.8 million. During the same quarter last year, Credence lost $112 million, or $1.84 a share, on revenue of $43.2 million. Analysts had expected a loss of 34 cents a share and revenue of $53.2 million, on average, according to Thomson First Call. Shares of Credence shed 61 cents, or 4 percent, to $14.67.

Altria Group
MO, -1.94%
unit Philip Morris USA announced that a New Hampshire jury found the company not liable for damages in a cancer death case. In the first smoking liability action to be decided in the state, "the jury decided this case on the evidence, and the evidence clearly established that [the plaintiff's husband] well understood the risks of smoking, and that he chose to accept those risks," said Philip Morris general counsel William Ohlemeyer in a written statement. The panel deliberated for less than two days before reaching the verdict, the company added. See full story. Shares of Altria edged up 34 cents after the bell to $50.93.

Finally, shares of Beacon Power
BCON
an energy storage systems developer, gained in active trading after the company said it has completed delivery of qualification units of the Smart Power M5 power conversion system to potential U.S. solar power distributors. Shares of Beacon added 9 cents, or 8 percent, to change hands for $1.22.

Monday's advancers

Adobe Systems'
ADBE, -8.04%
shares added more than 5 percent after the company received an upgrade from UBS to "buy" from "neutral" due to valuation and signs of sales stability in Japan.

Antigenics'
AGEN, -0.95%
shares surged almost 21 percent after the company said the Food and Drug Administration has lifted the partial clinical hold on two phase III clinical trials of the company's Oncophage personalized cancer vaccine. The move allows Antigenics to begin patient enrollment immediately, and it comes 13 weeks after the FDA's request for product characterization information.

Brink's
BCO, -2.97%
shares rose nearly 7 percent after the armored-car firm was the subject of a positive article in Barron's. The company has shed nearly all the natural-resource holdings from its previous coal-mining ownership, the magazine notes. Obligations from the coal business continue to take 72 to 76 cents a share, but that liability will not grow. That leaves the money-protection division, a home-security unit and the troubled BAX Global air-freight division, which is hamstrung by tough competition. An unnamed hedge-fund manager tells Barron's that shares could continue this year's rise if the BAX problems can be resolved, with a price target of $30 to $35.

Delta Air Lines
DAL, +0.52%
rose more than 7 percent after the company said Leo Mullin, its chairman and chief executive officer, will retire on May 1, 2004. He will step down as CEO on Jan. 1, and as chairman on April 23. Gerald Grinstein will become CEO effective Jan. 1, and John Smith, Jr. will assume the position of non-executive chairman. Grinstein has been a Delta board member for 16 years, and was formerly CEO of Western Airlines and Burlington Northern.

Fairchild Semiconductor
FCS
gained almost 8 percent after Lehman Bros. raised its rating on the stock to "overweight" from "equal-weight" before the opening bell. The firm, which also boosted its price target on the stock to $27 from $20, cited relative valuation, accelerating revenue growth, and "tremendous" earnings leverage for the upgrade.

Hastings Entertainment
HAST, -1.25%
shares soared nearly 17 percent after the Amarillo, Texas-based multimedia entertainment products retailer reported third-quarter loss of $3.8 million, or 34 cents per share, narrower than its year-ago loss of $6.6 million, or 58 cents per share. The latest results include a charge of $300,000, or 3 cents per share, related to the adoption of a new accounting standard. Revenue rose 2 percent in the latest three months to $112.8 million from $110.6 million in the same period a year earlier. The company attributed this sales improvement to a 2.4 percent increase in merchandise same-store sales in the quarter, and said the bottom line was helped by cost controls. Hastings said the latest results were "slightly better" than internal projections, and it raised its outlook for the year ending Jan. 31, 2004 to earnings of 45 to 50 cents per share from its prior projection for a profit of 27 to 32 cents per share.

ImClone Systems
IMCL
rose almost 7 percent after it and partner Bristol-Myers
BMY, -1.09%
filed a new drug submission in Canada for the use of the Eribitux oncology compound in combination with irinotecan for the treatment of metastatic colorectal cancer. The submission is being given Priority Review, the companies said.

Powerwave Technologies
PWAV
added nearly 7 percent after the company signed a multi-year master purchasing agreement for its 1900 Megahertz code-division-multiple-access radio frequency power amplifiers with Sprint PCS
PCS
The deal includes Powerwave's booster products for the PCS frequency range. Neither purchasing volume nor financial terms were specified in the agreement.

UniSource Energy
UNS, -0.57%
shares surged more than 26 percent after the company announced a deal to be acquired by an investment group in a deal valued at approximately $3 billion. Saguaro Utility Group has agreed to pay $25.25 per share for UniSource, the parent of Tucson Electric Power and other energy holdings. The buyout price works out to a premium of 30 percent over UniSource's Friday closing price of $19.40 per share. Saguaro is headed by Fred Rentschler, who has held executive positions at Northwest Airlines, Beatrice Cos. and Armour-Dial, and includes Kohlberg Kravis Roberts, J.P. Morgan Partners and Wachovia Capital Partners.

Wegener
WGNR, -15.45%
shares rose more than 7 percent after the Duluth, Ga., firm said it has received a contract worth roughly $2.5 million from Mega Hertz, its U.S. distributor. The order is for digital television processing products, specifically Wegener's line of 8VSB demodulators and multiplexers.

Wireless Facilities
WFII
surged more than 8 percent after the company named Eric DeMarco president and chief operating officer. DeMarco most recently served as president and chief operating officer of Titan Corp.

Monday's decliners

ASAT Holdings
ASTT
fell almost 10 percent. Before the bell, the provider of chip package design services posted a loss of $2.9 million, or 2 cents per American Depositary Share, for the second quarter, narrower than its year-ago equivalent loss of $3.9 million, or 3 cents per share. A single analyst polled by Thomson First Call was looking for a loss of 2 cents per share in the period. Looking ahead, the company said it expects a upturn in the semiconductor industry going into calendar 2004, and that it plans to add capacity to meet the demand it's seeing. ASAT forecast between a loss of a penny per share and earnings of a penny per share, and a sequential revenue increase of 10 to 15 percent in the third quarter from its second-quarter total of $48.1 million.

Cardinal Financial
CFNL
shares fell more than 8 percent after the bank holding company in Virginia, said late Friday that it filed to sell about 6 million shares, including about 788,000 shares as an over-allotment. The company presently has 10 million shares outstanding.

Critical Path
CPTH
lost more than 9 percent after the company appointed William Smartt as its chief financial officer. He replaces Paul Bartlett, who was CFO since February, and chief operating officer since August 2003. Smartt was previously the CFO of DHL Airways, Ingres Corp. and Di Giorgio Corp.

Insignia Systems'
ISIG, +0.00%
shares tumbled more than 8 percent after the promotional services provider said late Friday that it expects to post a $1.5 million operating loss in the fourth quarter. Revenue was estimated at $5.3 million. Insignia said the loss could go higher based on legal fees and what was called "disappointing" revenue so far.

LCC International
LCCI
slid almost 5 percent after the company priced a follow-on public offering of seven million class A common shares at $4.10 each. Five million of the shares will be sold by selling stockholders. Sellers include MCI WorldCom, which is offering 1,420,550 shares, half of its stake in LCC. Also, The Carlyle Group is selling 1,057,566 shares, 50 percent of its holdings, and Telcom Ventures and RF Investors plan to sell 2,521,884 shares in total, 35 percent of their holdings. The company plans to use its estimated $7.6 million in proceeds for general corporate purposes, including working capital. The deal includes an over-allotment option for the sale of an additional 1,050,000 shares.

Lincare Holdings
LNCR
lost more than 11 percent. On Friday, the stock dropped roughly 15 percent after Wachovia Securities lowered its rating on the provider of respiratory services to "underperform" from "market perform." The firm said the Medicare reimbursement cuts included in the Prescription Drug bill are worse than expected for Lincare. Reimbursement for respiratory therapy drugs could be cut by 16 percent in 2004, and 65 percent in 2005 if the bill is enacted, Wachovia said.

Vasomedical
VASO, +1.15%
sank more than 14 percent after the company said late Friday that cuts in Medicare and Medicaid fees, effective Jan. 1, will result in payments for some procedures that will drop as much as 38 percent. Vasomedical said that it will work to have the size of the cuts re-considered.

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